landowner

I received a letter to sign an Oil & Gas Lease

I don't know anything about mineral rights etc.  I just received a letter to sign an oil and gas lease for Sabine Oil and Gas Corp wants to lease my mineral interest.  The letter is from Monument Resources.  I have 0.46838 Net Mineral Acres Access of approx 120.28 gross acres of land.  

The particulars are:

3 year lease

3/16 Royalty

Bonus payment of $300 per net mineral acre equaling $140.51

Is this a good deal?  Thanks for any info you can provide.

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landownerPermalink Reply by Michael on August 18, 2023 at 11:44

PS:   The land is the E.W. Gibbs Survey, A-229, Panola County Texas


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on August 18, 2023 at 11:49

Is Monument Resources leasing on behalf of Sabine?  I'd ask.  It's not a great offer but with less than a half mineral acre, your negotiating position is poor.  The royalty is the more important lease term.  I would ask for a one fifth royalty (20%) and I would forgo the bonus if I had to to get it.  If Monument Resources is not representing Sabine, I'd pass and wait hoping that as time to develop rolls around Sabine would make a somewhat better offer.  Al of Panola County is good rock and should see full development.


landownerPermalink Reply by Michael on August 18, 2023 at 12:31

Yes, Monument Resources is requesting leasing on Sabine's behalf.   Thank you Skip for your valuable insight.

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